1. Field of the Invention
The present invention relates to a method of cashier check verification. In particular the present invention relates to a method of verifying that a cashier's check is authentic and has not yet been cashed to prevent multiple copies of an authorized cashier's check or unauthorized cashier's checks from being cashed. It further provides a method of authorizing payment on the cashier's check.
2. Description of Related Art
Check fraud is accelerating as a world-wide problem with over $10 billion lost to fraud in the US alone. It appears that in excess of 1 million worthless checks enter the banking system daily and as technology advances, so does the sophistication of the criminal in the banking industry. Accordingly, the amount that fraudulent checks are being written for is increasingly over more than $100,000. Money orders, personal checks and the like are particularly susceptible to fraud and so merchants and individuals frequently request cashier's checks as payment for products and services.
A cashier's check is a check guaranteed by a bank for the payment of the check. They are frequently treated as cash and many banks will clear the check immediately without checking for the validity of the cashier's check until after it has paid on the check. Cashier's checks, generally, are also produced with security features including watermarks, security threads like currency, color shifting ink and special paper. All these features are designed to decrease the ability to copy or counterfeit the cashier's check. The checks are usually signed by an officer of the bank with the power to bind the bank to payment.
In spite of the increased safety of a cashier's check, their increasing use has led to various scams and counterfeiting schemes involving cashier's checks. Typically, a counterfeit cashier's check is given to someone in an amount more than owed and the recipient is expected to return the difference in cash only to find out later that the original check was fraudulent. When a fraudulent check is paid, even if it appeared to be a legitimate cashier's check the individual cashing it has to pay back the entire amount leaving him out the money sent to the counterfeiter. Other schemes involve copying of legitimate cashier's checks and cashing multiple versions of the same check before the issuing bank actually clears the original check or modifying the amount of a an issued cashier's check. Since banks prefer to pay on the cashier's check immediately upon presentment, it is not infrequent that the bank charges back the client recipient when the check is discovered to be a forgery or that a bank or other institution loses money in the transaction.
Many different types of forgery prevention have been tried though never very successfully with cashier's checks. In U.S. Pat. No. 5,925,865 issued Jul. 20, 1999 to Steger there is described an apparatus for automatically accessing and verifying checking account status based on information contained in a bar code printed on a check, travelers check or money order. The information can be transmitted to a bank for clearance but the immediate means of preventing the fraud is not disclosed.
In U.S. Pat. No. 5,936,219 issued Aug. 10, 1999 to Yoshida et. al., there is disclosed a computer based (not internet) electronic payment system in which a payer's check issuing computer issues an electronic check having a check identifier and an issue time where the check identifier includes a payer identifier for uniquely identifying a payment. The system is designed for clearing checks internally and not for interbank transactions nor for simple merchant inquiries.
In U.S. Pat. No. 6,808,109 issued Oct. 26, 2004 to Page there is disclosed a system and method for verifying the authenticity and payment of a check at any of a plurality of banks or check cashing sites, wherein a payor or issuing site determines a first set of data including account and individualized payee data, which is communicated to a processing center for temporary storage and eventual comparison. The check can eventually be redeemed authorized or refused.
In U.S. Pat. No. 6,073,121 issued Jun. 6, 2000 to Ramzy there is disclosed a method which improves check fraud prevention systems both in printing and verifying
In U.S. Pat. No. 7,201,323 issued Apr. 10, 2007 to Kotovich et al., there is disclosed a system and method for validating the authenticity of a signature on a document, such as a check, by providing a document from an account, the document including an actual signature and a machine-readable identifier wherein the machine-readable identifier contains a string of data representing the integral characteristics of all valid account signatures and a person-specific confidence threshold.
Accordingly, it would be useful to have a method or system to allow users of cashier's checks to verify and cancel checks and to allow users in the public domain to verify the validity of a given cashier's check.